Chrysler and Fiat break dance on EV development

Not very long ago Chrysler Corp. pocketed more than $12.5 billion in government bailout funds to avoid a bankruptcy filing, promising on its way to the bank to build more fuel efficient cars and produce electric vehicles by 2011.

About three years later the U.S. carmaker has launched no hybrids – although plans for them remain in the works – and its ENVI electric vehicle program is fading fast in the rearview mirror largely because of a strategic decision by Fiat. Fiat received a 20 percent stake from the U.S. in exchange for the Italian carmaker’s more fuel-efficient chassis and engine technology, and is apparently calling the shots now at Chrysler.

Last year Chrysler had three electrics under development and five EV concepts were unveiled at the Detroit Auto Show. One EV launch, the Dodge Circuit, was even planned for late 2010.

Chrysler had also promised it would have about 500,000 EVs humming along by 2014. Last week Fiat and Chrysler CEO Sergio Marchionne slashed that somewhat grandiose estimate to 60,000 EVs or about 2 percent of Chrysler sales. He also said EVs remain a very tough proposition with current battery technology.

So despite some reports that the EV program has been scrapped, Fiat is putting a new face and direction on Mopar’s electric vehicle program. EVs eventually will pop out of the Chrysler/Fiat dalliance, but not as soon as first anticipated.

According to autoblog, Chrysler has disbanded the ENVI program, but has “integrated the group back into its normal product development organization.”

This might not be as bad as some think: The same number of workers or possibly even more are slotted for EV programs at Chrysler, according to reports, and EVs are now part of the company’s mainstream development chain, not a “skunk works” type of sideshow.

It makes no sense for Chrysler to cede the EV field entirely to the Chevy Volt and the Cadillac Converj extended range EV concept, or Ford’s planned plug-in van, but this sudden restructuring and shift in strategy and tactics does put it in the slow lane in the EV market race.